STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

THOMAS A TURINSKI, Employee

N & M TRANSFER CO INC, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 08401347AP


An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The employee worked for eight years as a warehouse worker and forklift operator for the employer, a trucking company. He last performed work for he employer on Thursday, April 17, 2008 (week 16).

Sometime in the spring of 2008, the employer's president discovered that 10 of his full-time workers (including the employee) were also employed part-time by a competing transportation business (in the "less than truckload" or "LTL" industry). He instructed the director of administration to draft an "Outside Employment" policy. On Friday, March 28, the director of administration conducted a group meeting with the employees to disseminate copies of the new policy, and to answer any questions. The policy stated:

Outside employment is permitted by N & M, unless it is found to interfere with the employee's job performance at N & M. If the quality of an employee's job performance at N & M begins to suffer, the employee will be asked to choose between jobs.

In addition, an employee of N & M will not be permitted to work for another employer, or as an independent contractor, for a company or entity, who is in any type of business that is in competition with N & M. In addition to the above, an employee will not be permitted to work for another employer while on a leave of absence, or while absent for illness from N & M.

Lastly, an employee is not allowed to work for an entity when such employment could be detrimental to the image of N & M.

Employees at the group meeting raised some question about whether they would be permitted to give notice to their part-time employer. The director of administration stated that he would check on this issue with the company president. He told the workers that, until he could have this conversation on Monday, March 31, no one would be penalized for working for the competitor. This concern raised at the meeting about the effective date of the policy was not the employee's, however. Rather than worrying about the niceties of providing a two-week notice the employee concluded that he could not live without the two paychecks his work schedule (which he had been following for two years) provided him. He stated unequivocally, "I won't quit either place. I'll continue working at both places." The director of administration responded, "It's your choice. If you continue working at (the competitor) you'll be terminated."

The director of administration made arrangements for the employee to meet personally with the owner on Monday, March 31. The employee acknowledged that this meeting lasted between 45 minutes and an hour. At the meeting, the employee referred to an earlier decision by the employer to "grandfather" more senior dock workers when initiating a new requirement that dock workers also function as expedited service drivers. The driving requirement was ultimately applied only to new hires. The employee wondered whether the president would be willing to "grandfather" current part-time employee's of the competitor. The president told him, "No." the president also said, "if only 3 or 4 people had been working at (the competitor) we probably wouldn't have done anything about it."

On March 31, the director of administration held another group meeting (at which the employee was not present) and informed all workers that the policy was effective that same date. Copies of the policy were hung on all communication bulletin boards throughout the plant.

The employer alleged that six of the ten workers in question quit working for the competitor. When it received confirmation that four workers remained working there on a part-time basis all 4 (including the employee) were "discharged." The employee was notified that the employment relationship was at an end on April 17, 2008 (Thursday of week 16). He never again performed work for this employer.

The first issue to be decided is whether the employee quit or was discharged.

The employee and the employer jointly contended that the employee was discharged, differing only on the issue of whether the discharge was for misconduct connected with his employment. The commission is not bound by the parties' characterization of the nature of the separation. The commission disagrees with the joint contention of the parties that the employee was discharged.

An employee may be found to have voluntarily terminated his or her employment despite the fact that the employee has never expressly stated, "I quit." For unemployment insurance purposes, a quit can include a situation in which an employer actually discharges a worker. Nottelson v. ILHR Dept., 94 Wis.2d 106,119 (1980). An employee can voluntarily terminate employment by knowingly refusing to take action that would have allowed his or her employment to continue. Shudarek v. LIRC, 114 Wis.2d 181,188 (Ct. App. 1983). An employee may demonstrate intent to leave his or her employment by word or manner of action, or by conduct, inconsistent with the continuation of the employment relationship. Nottelson, Wis.2d at 119; Dentici v. Industrial Comm., 264 Wis. 181, 186 (1953).

The employee in this case had been clearly instructed by the employer that his continuing to work for a competitor would result in the end of his employment with the employer. The employee knew that his voluntary choice not to resign his outside employment with the employer would cause the termination of his employment with the employer. The employee's actions were plainly inconsistent with continuing his employment relationship with the employer and, for unemployment insurance purposes, must be considered a quitting.

Having determined that the employee was not discharged and that he voluntarily terminated his employment with the employer, the second issue to be decided is whether the employee's quitting was for any reason that would permit the immediate payment of unemployment benefits.

Wis. Stat. § 108.04(7)(a) provides that if an employee terminates employment, benefit eligibility shall be suspended until four weeks have elapsed since the week of quitting, and the employee has earned wages in covered employment equaling at least four times the weekly benefit rate, unless the termination was with good cause attributable to the employer or was within some other statutory exception.

Wisconsin Statute § 108.04(7)(b), provides for payment of benefits if an employee quits with "good cause attributable to the employing unit." The commission must determine whether the employee's decision to quit was a reasonable reaction by the employee to some act on the part of the employer. Stetz v. DILHR, et. al., No. 136-215 (Wis. Cir. Ct. Dane County Feb.13, 1973).

Here the employer's implementation of a new policy prohibiting its workers from engaging in any outside employment with potential competitors was not per se unreasonable, even considering the employer's immediate implementation of that new condition of employment. The employer had determined that adopting such a policy was in the employer's best business interests, and the employer made a valid business decision in that regard. The statement of the employer's president that had it only been 3 or 4 individuals working for the competitor he would have taken no action weakens its argument that the action was necessary to prevent its competitor from gaining an unfair advantage in the market. At any rate, the adoption and enforcement of such a policy by the employer constituted a unilateral and material change by the employer in the terms of the parties' existing employment contract. That action by the employer had a substantial and detrimental impact on the employee, restricting his freedom to enter into employment contracts with other employing units of his choosing and, in effect, leaving him with no option except to immediately abandon his second source of income from his employment with another employing unit. The employee's quitting his employment with the employer was a reasonable reaction to those highly prejudicial actions by the employer. Hence, for unemployment insurance purposes, the employee's quitting was with good cause attributable to the employer.

The commission therefore finds that in week 16 of 2008, the employee was not discharged by the employer, within the meaning of Wis. Stat. § 108.04(5).

The commission further finds that in week 16 of 2008, the employee terminated work with the employer with good cause attributable to the employer, within the meaning of Wis. Stat. § 108.04(7)(b).

DECISION

The decision of the administrative law judge is reversed. Accordingly, the employee is eligible for benefits beginning in week 16 of 2008, if otherwise qualified.

Dated and mailed September 19, 2008
turinth . urr : 145 : 1 VL 1007.01 : VL 1005.01

James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner


MEMORANDUM OPINION

The commission did not discuss witness credibility and demeanor with the ALJ prior to reversing her decision in this case. The commission did not reverse the ALJ's decision based on a different assessment of witness credibility and demeanor. The facts for the most part were not in dispute. The commission reversed the ALJ's decision because it reached a different legal conclusion when applying the law to the facts found by the ALJ.

cc: Attorney Patrick P. Gill
Attorney Michael J. Kuborn


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